Business Taxes Law Guide – Revision 2016

Sales and Use Tax Annotations

365.0000 MORTGAGEES AND TRUSTEES

Annotation 365.0040

365.0040Reacquisition of Business by Mortgagee. Where tangible personal property is sold under a purchase money mortgage and the purchaser-mortgagor is in default and the seller-mortgagee reacquires the property, and the only consideration received by the mortgagor is cancellation of the unpaid balance of the mortgage note, the transfer to the mortgagee does not constitute a taxable sale. However, where tangible personal property is subjected to a nonpurchase money mortgage and the mortgagor defaults and transfers his beneficial interest and title in the mortgaged property to the mortgagee in consideration of cancellation of the mortgagor's obligation, the transfer of title to the mortgagee constitutes a taxable retail sale. 6/27/67.

Do you have feedback about the BOE website?

Share it with us in the text boxes below!
Please keep in mind that you will not receive a response upon sharing your feedback with us.

If you need help with tax questions, online services, or payment please call the BOE Customer Service Center at 1-800-400-7115.

For your security, please do not include any private information such as social security numbers or contact information when submitting this form.
Thank you for helping us improve the California taxpayers' experience on boe.ca.gov.

Were you able to easily find the information you were seeking?

What changes would you make to this page to improve the user's experience?